Government U-turn on non-dom tax

The government has been forced to backtrack on plans to tax foreigners domiciled in the UK after pressure from business leaders.

Dave Hartnett, HM Revenue & Customs’ acting chairman, has written to companies clarifying the government’s proposals to levy a charge of £30,000 on non-domiciled residents (nondoms) who have lived in the UK for seven years. He said that as long as non-doms declare their remittances to the UK and pay UK tax on them, they will not be required to disclose information on the source of the remittances. Money brought into the UK to pay the £30,000 charge will not itself be taxable, he said, and it will continue to be possible to bring artworks into the UK for public display without incurring a tax charge. Tax on offshore trusts would not apply retrospectively. John Cridland, deputy director general of the Confederation of British Industry, says the clarification is a victory for common sense.

“The proposals were clearly cobbled together in a hurry and went a lot further than the £30,000 headline figure, with the clauses on trusts and the retroactive aspects for taxing gains particularly punitive,” he adds.